Somewhere in the Atlanta, GA Metro area another business is opening. They’ve created a business plan, obtained capital, performed marketing studies and created a targeted customer list. Real estate space is a bit tricky but otherwise they are ready to launch.
Unfortunately, our business is missing one component and it’s a big one. It’s not that they aren’t sophisticated, just the opposite. The brightest minds with years of experience are finally making the leap to go out on their own. What they are missing has plagued nearly every start-up since the creation of business. It’s called the protection of assets – internal assets that is. Protection from occupational fraud and insider theft.
Ron Simmons who is the District Director at the University of Georgia, Small Business Development Center was posed a question. Simmons has reviewed countless numbers of business plans during his career. He was asked how many business plans factored in the protection again internal fraud and embezzlement. Without hesitation Simmons said, “None. No one ever thinks it will happen to them.”
Simmons is bluntly correct. Consider three friends who’ve known each other since the beginning of dirt. The families know one another and even vacation together. They decide to go into business together. Something changes along the way. The change causes one friend to take money they’re not entitled to. In another scenario, a mobile computer repair company opens its doors. One of the technicians tells customers he can do the work cheaper for a cash payment with “his company.” A landscaping company hires a motherly figure as their bookkeeper. Then, Betty the bookkeeper starts writing checks to herself. For another, a proprietary system is stolen along with a list of clients.
So, you see the article title is not a tease. Readers will undoubtedly recall a tale of internal theft at a place of employment. Like car accidents or a terminal illness, executives believe it won’t happen to them. They are a good judge of character, they believe. News flash! Even the judiciary make mistakes. Your lifelong dream is your baby and it should never be left to chance. It’s not that perfection must be in place. It’s not like it “can’t happen;” however, let’s take precautions.
The first step is to set expectations upon the startup and they should be passed on to every employee hired until the day you pass on. It’s the integrity expectation. Everyone conducts themselves with integrity and has respect for the company’s assets. Don’t embellish an expense report. Don’t fill your personal car up with gas on the company credit card. If you work 7 hours, don’t say you worked 8 hours, etc.
For one Atlanta private investigator, he has noted that fear and discomfort are often present in today’s leadership on the subject. The investigator is also a certified fraud examiner and often speaks to organizations about workplace fraud. He says in part,
- “More often if a company has regulatory requirements, the leadership actively speaks about compliance in those areas. However, when it comes to respecting its internal assets, not so much. You might see an occasional footnote on a document. They often feel they would insult their staff or it’s just a crucial conversation they avoid. You can deliver a consistent message of honesty in a clear way that doesn’t alienate people. In addition, ethical people don’t mind the message and actually appreciate it.”
- Zane Kinney, the investigator goes on to say, “It’s important to know that for 20 years things can purr along without any question, but something in the life of an employee changes. The change can be a financial pressure which causes the employee to act out of character. Along with messaging, a correct set of internal controls must be in place. The controls should enable early detection of a problem and a quick response. Third-party risk assessments by a certified fraud examiner should augment a company’s overall protection plan. This can greatly reduce incidents.”
Suppose you’ve never spoke to your staff before. It’s not too late to begin. Give them reassurance that nothing is wrong, but you’ve neglected to make it a core part of the organization’s principles. Make this your guiding compass. Dust off your old business plan and let integrity flow throughout.